Caterpillar Says Sales Woes Could Linger

Caterpillar Inc. said lower-than-expected equipment sales in the second half of the year could continue into next year, as the company reported revenue in its latest quarter remained battered, falling 16%.

Caterpillar shares, which had climbed 9.3% in the past three months, fell 2.1% to $84.17 in premarket trading.

Caterpillar also cut its earnings view for 2016, now projecting full-year earnings of $3.25 excluding restructuring costs, compared with its prior guidance for $3.55 a share. The company earned $3.50 a share in 2015. For revenue, the company now expects $39 billion, compared with its prior range of $40 billion to $40.5 billion.

"While we are seeing early signals of improvement in some areas, we continue to face a number of challenges," said outgoing chief executive Doug Oberhelman. The company pointed to no increase in orders for new equipment amid lower-than-expected construction equipment sales in the second half of 2016, which the company said could continue into 2017. Caterpillar also pointed to global economic uncertainty, such as the Brexit vote.

In addition to the outlook, the company reported revenue for the third quarter missed Wall Street's views.

The third-quarter results and financial forecasts come a week after Caterpillar said Mr. Oberhelman would retire as chief executive at the end of this year and as chairman at the end of March. He will be replaced Jim Umpleby, who will be first Caterpillar chief in a quarter-century to run the company without control over the board.

Over all for the September quarter, the company reported a profit of $283 million, or 48 cents a share, down from $559 million, or 94 cents a share, a year earlier. Excluding restructuring costs, earnings per share fell to 85 cents from $1.05 a year ago.

Revenue slid fell to $9.16 billion from $10.96 a year ago. Analysts predicted $9.87 billion in revenue, according to Thomson Reuters.

Write to Joshua Jamerson at [e-mail]

(END) Dow Jones Newswires

October 25, 2016 08:35 ET (12:35 GMT)

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